[Federal Register Volume 80, Number 214 (Thursday, November 5, 2015)]
[Proposed Rules]
[Pages 68473-68475]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-28142]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 80, No. 214 / Thursday, November 5, 2015 / 
Proposed Rules  

[[Page 68473]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 920

[Doc. No. AMS-FV-15-0056; FV15-920-1 PR]


Kiwifruit Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Kiwifruit Administrative Committee (Committee) to increase the 
assessment rate established for the 2015-16 and subsequent fiscal 
periods from $0.025 to $0.040 per 9-kilo volume-fill container or 
equivalent of kiwifruit handled under the marketing order (order). The 
Committee locally administers the order and is comprised of growers of 
kiwifruit operating within the area of production. Assessments upon 
kiwifruit handlers are used by the Committee to fund reasonable and 
necessary expenses of the program. The fiscal period begins on August 1 
and ends July 31. The assessment rate would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by November 20, 2015.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Specialty Crops Program, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938, or Internet: http://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register and will 
be available for public inspection in the Office of the Docket Clerk 
during regular business hours, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this 
proposed rule will be included in the record and will be made available 
to the public. Please be advised that the identity of the individuals 
or entities submitting comments will be made public on the internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Kathie Notoro, Marketing Specialist, 
or Martin Engeler, Regional Director, California Marketing Field 
Office, Marketing Order and Agreement Division, Specialty Crops 
Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or 
Email: [email protected], or [email protected]. 
Small businesses may request information on complying with this 
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 
Fax: (202) 720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing 
Order No. 920, as amended (7 CFR part 920), regulating the handling of 
kiwifruit grown in California, hereinafter referred to as the 
``order.'' The order is effective under the Agricultural Marketing 
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter 
referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 12866, 13563, and 13175.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the marketing order now in effect, 
California kiwifruit handlers are subject to assessments. Funds to 
administer the order are derived from such assessments. It is intended 
that the assessment rate as issued herein would be applicable to all 
assessable kiwifruit beginning on August 1, 2015, and continue until 
amended, suspended, or terminated.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. Such 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing, USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This proposed rule would increase the assessment rate established 
for the Committee for the 2015-16 and subsequent fiscal periods from 
$0.025 to $0.040 per 9-kilo volume-fill container or equivalent of 
kiwifruit.
    The California kiwifruit marketing order provides authority for the 
Committee, with the approval of USDA, to formulate an annual budget of 
expenses and collect assessments from handlers to administer the 
program. The members of the Committee are producers of California 
kiwifruit. They are familiar with the Committee's needs and with the 
costs of goods and services in their local area and are thus in a 
position to formulate an appropriate budget and assessment rate. The 
assessment rate is formulated and discussed in a public meeting. Thus, 
all directly affected persons have an opportunity to participate and 
provide input.
    For the 2013-14 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by USDA upon recommendation and information 
submitted by the Committee or other information available to USDA.
    The Committee met on July 17 and September 16, 2015, and 
unanimously recommended 2015-16 fiscal year expenditures of $132,725 
and an assessment rate of $0.040 per 9-kilo volume-fill container or 
equivalent of kiwifruit handled to fund Committee expenses. In 
comparison, last year's budgeted expenditures were $120,925. The 
assessment rate of $0.040 is $0.015 more than the rate currently in 
effect. The Committee's recommended 2015-16 expenditures are $11,800 
higher than last year's budgeted expenditures. The

[[Page 68474]]

primary reason for the increase is to provide funding for research. 
When applied to the Committee's crop estimate for the 2015-16 fiscal 
year of 2,297,000 9-kilo volume-fill containers or equivalent, the 
current assessment rate of $0.025 would not generate sufficient 
assessment income to cover anticipated expenses. The proposed 
assessment rate of $0.040 per 9-kilo volume-fill container or its 
equivalent would generate assessment income of $91,880. Anticipated 
assessment income combined with financial reserve and interest income, 
would provide sufficient funds for the Committee to meet its budgeted 
expenses while maintaining its financial reserve within the limit 
authorized under the order. (Sec.  920.42)
    The major expenditures recommended by the Committee for the 2015-16 
fiscal period include $80,000 for management expenses, $14,000 for two 
financial audits, $14,330 for research, $7,500 for International 
Kiwifruit Organization (IKO) travel, $2,500 membership fee to Buy 
California, and $2,500 membership fee to the IKO. Major budgeted 
expenses for the 2014-15 fiscal period were $80,000 for management 
expenses, $7,500 for a financial audit, $5,000 for handler audits, 
$2,500 membership fee to Buy California, $2,500 for IKO membership, and 
$12,500 for IKO travel.
    The assessment rate recommended by the Committee was derived by 
considering the amount of revenue needed to meet anticipated expenses 
divided by expected shipments of California kiwifruit. As previously 
mentioned, kiwifruit shipments for the 2015-16 fiscal period are 
estimated at 2,297,000 9-kilo volume-fill containers, which should 
provide $91,880 in assessment income. Anticipated assessment income 
derived from handler assessments, along with interest income and 
$40,756 from the Committee's authorized financial reserve would provide 
sufficient funds for the Committee to meet its budgeted expenses. It is 
anticipated that $29,119 would remain in the financial reserve at the 
end of July 2016, which would be within the maximum amount permitted by 
the order of approximately one fiscal year's expenses (Sec.  920.42).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon recommendation 
and information submitted by the Committee or other available 
information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee would continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA would evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking would 
be undertaken as necessary. The Committee's 2015-16 budget and those 
for subsequent fiscal periods would be reviewed and, as appropriate, 
approved by USDA.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this proposed rule on small 
entities. Accordingly, AMS has prepared this initial regulatory 
flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf.
    There are approximately 178 kiwifruit growers in the production 
area and approximately 28 handlers subject to regulation under the 
marketing order. Small agricultural producers are defined by the Small 
Business Administration as those having annual receipts less than 
$750,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $7,000,000 (13 CFR 121.201).
    The National Agricultural Statistical Service (NASS) reported total 
California kiwifruit production for the 2014 season at 27,400 tons, 
with an average price of $1,190 per ton. Based on the average price and 
shipment information provided by NASS and the Committee, it could be 
concluded that the majority of kiwifruit handlers would be considered 
small businesses under the SBA definition. Based on kiwifruit 
production and price information, as well as the total number of 
California kiwifruit growers, average annual grower revenue is less 
than $750,000. Thus, the majority of California kiwifruit growers may 
also be classified as small entities.
    This proposed rule would increase the assessment rate established 
by the Committee and collected from handlers for the 2015-16 and 
subsequent fiscal periods from $0.025 to $0.040 per 9-kilo volume-fill 
container or equivalent of kiwifruit. The Committee unanimously 
recommended 2015-16 expenditures of $132,725 and an assessment rate of 
$0.040 per 9-kilo volume-fill container. The proposed assessment rate 
of $0.040 is $0.015 higher than the 2014-15 rate. The quantity of 
assessable kiwifruit for the 2015-16 fiscal period is estimated at 
2,297,000 9-kilo volume-fill containers. Thus, the $0.040 rate should 
provide $91,880 in assessment income. Anticipated assessment income 
derived from handler assessments, along with financial reserve funds 
and interest income, would provide sufficient revenue for the Committee 
to meet its budgeted expenses, while maintaining its financial reserve 
within the maximum amount permitted by the order of approximately one 
fiscal year's expenses (Sec.  920.42).
    The major expenditures recommended by the Committee for the 2015-16 
fiscal period include $80,000 for management expenses, $14,000 for two 
financial audits, $14,330 for research, $7,500 for International 
Kiwifruit Organization (IKO) travel, $2,500 membership fee to Buy 
California, and $2,500 membership fee to the IKO. Major budgeted 
expenses for the 2014-15 fiscal period were $80,000 for management 
expenses, $7,500 for a financial audit, $5,000 for handler audits, 
$2,500 membership fee to Buy California, $2,500 for IKO membership, and 
$12,500 for IKO travel.
    Prior to arriving at this budget and assessment rate, the Committee 
considered alternative expenditure levels, to include maintaining the 
current assessment rate, but ultimately determined that the current 
assessment rate would generate insufficient revenue to meet its 
expenses.
    According to data from NASS, the season average producer price was 
$11.09 per 9-kilo volume-fill container in 2013 and $11.78 per 9-kilo 
volume-fill container in 2014. A review of historical information and 
preliminary information pertaining to the upcoming fiscal period 
indicates that the grower price for 2015-16 could range between $11.09 
and $11.78 per 9-kilo volume-fill container of assessable kiwifruit. 
Therefore, estimated assessment revenue for the 2015-16 fiscal year as 
a percentage of total producer revenue could be between 0.34 percent 
and 0.36 percent.
    This action would increase the assessment obligation imposed on

[[Page 68475]]

handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. However, these costs 
would be offset by the benefits derived by the operation of the 
marketing order. In addition, the Committee's meetings were widely 
publicized throughout the California kiwifruit industry and all 
interested persons were invited to attend the meeting and participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the July 17 and September 16, 2015, meetings, were public meetings and 
all entities, both large and small, were able to express views on this 
issue. Finally, interested persons are invited to submit comments on 
this proposed rule, including the regulatory and informational impacts 
of this action on small businesses.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189. No changes in those requirements are 
necessary as a result of this action. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large California 
kiwifruit handlers. As with all Federal marketing order programs, 
reports and forms are periodically reviewed to reduce information 
requirements and duplication by industry and public sector agencies.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this action.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Jeffrey Smutny at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A 15-day comment period is provided to allow interested persons to 
respond to this proposed rule. Fifteen days is deemed appropriate 
because: (1) The 2015-16 fiscal year began on August 1, 2015, handlers 
began shipping kiwifruit in September and the marketing order requires 
that the rate of assessment apply to all assessable kiwifruit handled 
during the fiscal period; (2) the Committee needs to have sufficient 
funds to pay its expenses, which are incurred on a continuous basis; 
and (3) handlers are aware of this action which was unanimously 
recommended by the Committee at a public meeting and is similar to 
other assessment rate actions issued in past years.

List of Subjects in 7 CFR Part 920

    Kiwifruit, Marketing agreements, Reporting and record keeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 920 is 
proposed to be amended as follows:

PART 920--KIWIFRUIT GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 920 continues to read as 
follows:

    Authority:  7 U.S.C. 601-674.

0
2. Section 920.213 is revised to read as follows:


Sec.  920.213  Assessment rate.

    On and after August 1, 2015, an assessment rate of $0.040 per 9-
kilo volume-fill container or equivalent of kiwifruit is established 
for kiwifruit grown in California.

    Dated: October 30, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-28142 Filed 11-4-15; 8:45 am]
 BILLING CODE 3410-02-P